Dunkin' Donuts announces major expansion plans in China to rival Starbucks

Over the next 20 years, the coffee and baked goods chain said it plans to strengthen its presence in the country, expanding its network of 16 restaurants to 1,400.

The venture marks the company’s largest development agreement, and could be construed as a response to coffee rival Starbucks, which has opened about 1,500 stores in the country since first entering the market in 1999.

But both brands have to contend with a unique set of consumer demographics in China: a tea-loving country unfamiliar with the Western habit of grabbing a morning coffee every morning before going to work, pointed out the GlobalPost last year.

Instead, coffee is an occasional beverage, as the average Chinese person drinks three cups a year.

Dunkin’ Donuts could also hold an advantage over Starbucks with its more affordable price points, as the more premium brand has been criticized for hiking prices up to 20 percent higher than prices in the US.

Starbucks’ pricing strategy, however, has helped it gain recognition as a premium label among label-conscious consumers in China, particularly among its younger clientele.